Plaintiff’s Trade Dress Claims Lose Traction

Trade dress is defined as the overall “look and feel” of a product and may include features such as size, shape, color, design, and texture. Trade dress can therefore, include things such as the design of a product, the packaging in which a product is sold, the color of a product or of the packaging in which a product is sold, and the flavor of a product. While trade dress can be protected with or without formal registration, formal registration with the United States Patent and Trademark Office (USPTO) offers several advantages including: constructive notice of one’s ownership claim and nationwide priority over subsequent users; prima facie evidence of one’s exclusive right to use the trade dress; a shift in the burden to the second comer to challenge the validity of one’s registration; and an incontestable status after five years.

There are, however, two primary issues that must be considered when applying for trade dress protection. These include:

  1. functionality; and
  2. distinctiveness (which can be inherent distinctiveness, or acquired distinctiveness namely secondary meaning).

With regard to the first issue, trade dress protection is not available if a product design is considered to be functional.   However, even if a product design is not functional, the applicant must show that the product design is distinctive.

The recent case of Tractel, Inc. v. Wuxi Shenxi Construction Machinery Co., LTD. is notable for a couple reasons. Case No. 10-17007 (9th Cir. Feb. 7, 2012).  First, decisions in trade dress cases are relatively rare.  The plaintiff (“Tractel”) in the case is a manufacturer of a traction hoists, which are typically used for commercial building projects and external maintenance, like window washing.  Tractel brought suit against the defendant (“Wuxi Shenxi”), another manufacturer of traction hoists, claiming: infringement of Tractel’s trade dress under the Lanham Act; federal unfair competition; and related state law trade dress and unfair competition claims.

In the case, Tractel essentially claimed that the overall exterior appearance of its hoist is nonfunctional because “the hoist’s design -wherein the component parts meet each other at right angles – demonstrates a ‘cubist’ look and feel.” The court pointed out that Tractel bore the burden of proving non-functionality and rejected Tractel’s arguments that its design was nonfunctional, stating:

[T]here is no evidence that anything about the appearance exists for any nonfunctional purpose. Rather, every part is…functional. A piece of industrial machinery with “rectangular” components that meet each other at “right angles,” without more, is wholly insufficient to warrant trade dress protection. It is not enough to say that the design portrays a “cubist” feel – so does a square table supported by four legs….Tractel provides no other evidence of fanciful design or arbitrariness.

The court noted that Tractel did not seem to understand that functional features could not be protected under trade dress law simply because the features were visually distinguishable from other competitors’ offerings; the features also had to be nonfunctional.

The court’s decision, however, is even more noteworthy because it affirmed the lower court’s finding that the case was “exceptional” for purposes of awarding attorney’s fees to the defense, based on Tractel’s “utter failure of proof” to support its nonfunctionality arguments. The court found Tractel’s suit unreasonable, based largely on the finding that even after two years of discovery and numerous depositions, it was unable to produce any evidence to support its claims. Tractel, furthermore, should have been put “on notice” that it did not have a colorable claim after a district court denied Tractel’s motion for a preliminary injunction based on the finding that there was nothing “arbitrary, incidental or ornamental” about its design.

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Snack Food Giant Warns Others to “Lay” off

No Scoop For You!  On February 10, 2012, Frito-Lay North America, Inc. (“Frito-Lay”), the snack food giant owned by PepsiCo., filed a lawsuit for patent and trademark infringement against Medallion Foods, Inc. and Ralcorp Holdings, Inc. (“Medallion”) in the U.S. District Court for the Eastern District of Texas (Case No. 4:12-cv-00074). In its motion for a temporary injunction, among other causes of action under Texas common law, Frito-Lay alleges that Medallion’s “BOWLZ” tortilla chips infringe on four of its patents (i.e., U.S. Patent Nos. 6,610,344; 6,592,923; 6,638,553; and U.S. Design Patent No. 459,853), on its trademarks, and also on its trade dress relating to its distinctively-shaped “SCOOPS!” tortilla chips.

Burnt To A Crisp.  In other snack news, in an ongoing battle that started back in 2010, Frito-Lay is opposing one of Princeton Vanguard’s trademark applications for the PRETZEL CRISPS mark from registering, and is also petitioning to cancel Princeton Vanguard’s other registered trademark application for PRETZEL CRISPS, alleging that the mark is generic. In one of its arguments before the United States Patent and Trademark Office, Frito-Lay argues that “the combination of ‘pretzel’ and ‘crisp’ gains no meaning as a phrase over and above the generic meaning of its constituent terms,” no more than “milk chocolate bar” would. While Warren Wilson of Princeton Vanguard may believe that “[t]his fight is about a big company that wants to dominate the snack food category by crushing a little company like [ours] rather than by competing with [us],” Princeton Vanguard’s plight highlights the caveat to selecting marks that may be considered descriptive of the goods or services.

In the age of the Internet where consumers can type a few simple words to locate any product or service, marketers have increasingly favored the adoption of descriptive marks for the simplicity and ease with which they may communicate the goods and/or services that are associated with the trademark. However, in doing so, trademark owners, like Princeton Vanguard, risk spending more of their resources down the line trying to register or defend their trademarks. Princeton Vanguard has, to date, exhausted more than $1 million in legal fees.

As F. Scott Kieff, a law professor at George Washington University states, the case could go either way. Princeton Vanguard “will have to show that there is some secondary meaning to the term ‘pretzel crisp’ out there in the relevant population that goes beyond simply provoking thoughts of thin pretzels that are crispy and refer to something specific.”

Barton Beebe, a professor at the New York University Law School, specializing in intellectual property law, observes that “big companies will do this to rough up their competitors,” and “[i]f they can’t win in the marketplace, they try to soften [their competitors] up with legal fees and distract them. Even if they lose the case, it’s a Pyrrhic victory because the small company has wasted so many resources.”

Excess Baggage: The Hangover’s New Woes

The first lawsuit was brought by a tattoo artist for copyright infringement. A second lawsuit was brought by a stunt man for damages he suffered while shooting a scene. A third lawsuit was brought by a man who alleged the movie was based on a script chronicling his Asian excursion. Continuing this string of lawsuits, Louis Vuitton now brings a fourth lawsuit against Warner Bros., for its movie “The Hangover Part II.”

The luxury brand filed its lawsuit in New York and alleges that a piece of luggage featured in one scene of the movie was a fake and contends that ithas been damaged by consumer confusion after dialogue used in the movie has allegedly became a catchphrase, of sorts. The scene in question involves the character Alan, played by Zach Galifianakis, saying “Careful, that’s a Louis…that is a Louis Vuitton,” and fails to silence the “s” in “Louis.” The company, suing for trademark dilution, false designation of origin, and unfair competition, is seeking damages and an injunction to stop Warner Bros. from distributing the movie on DVD as long as the luggage remains in the scene.

Tootsie Roll Tells Footzyroll to Roll Over

While consumers are not likely to confuse a rollable ballet slipper with candy, Tootsie Roll Industries contends that Rollashoe is trying to profit from the goodwill it has worked to establish since 1908. The lawsuit, which was filed in Illinois federal court, alleges that Rollashoe’s Footzyrolls brand infringes on the Chicago-based Tootsie Roll brand and that the Footzyrolls brand will likely confuse and deceive customers into believing that the Footzyrolls slippers are associated with Tootsie Roll’s products.

Tootsie Roll, which licenses the use of its “Tootsie Roll” trademark for use in connection with other items such as clothing; footwear; and accessories; states that both companies are targeting a similar class of consumers, and that these consumers are likely to believe that the Footzyroll slippers are affiliated with Tootsie Roll. The Caplan sisters, who founded Rollashoe, argue that the Footzyroll mark was not made with the intent to confuse consumers but was, rather, a simple description of the soft roll-up shoes that were made for women to carry in their handbags, if, and when, they should need instant relief from wearing high heels.

While Tootsie Roll may have a difficult time proving a likelihood of confusion considering the fact that Footzyrolls are marketed to women who may need an extra pair of shoes, rather than fans of the famous candy; and considering the differences in the respective brands’ design and packaging; Tootsie Roll may still have a convincing claim for trademark dilution. Trademark dilution is a concept that provides an owner of a famous mark, such as Coca-Cola; McDonald’s; and Pepsi; relief from the acts of another when the actions of the other party may water down, erode, or weaken the cachet of the famous mark.

While the Caplan sisters are prepared to fight to protect their brand, their plight underlines the importance for small businesses to understand the importance of trademarks, the protections they afford, and the importance of assessing whether there may be a likelihood that a trademark a small business intends to use may violate an already existing trademark.  CNN Money provides an informative article regarding the importance of trademarks here.

Intellectual Property Protection at the Border

The United States Customs and Border Protection (CBP), a bureau of Homeland Security, is a powerful ally in the fight against trademark and copyright infringement. Because intellectual property is a “negative right,” allowing right holders to prohibit others from making or copying without permission what has been created, it is the right holders’ responsibility to police their intellectual property and protect their goodwill against counterfeit goods or confusingly similar items.
The CBP assists right holders by serving as their “eyes and ears” and preventing foreign entities from importing “gray market” goods that are counterfeit or confusingly similar to goods bearing a federal registration number. The CBP accomplishes this by maintaining a recordation system for marks registered on the principal register with the United States Patent and Trademark Office or copyrights registered with the United States Copyright Office.

In order to simplify the process of recording federally registered trademarks and copyrights for right holders, the CBP has released the Intellectual Property Rights e-Recordation (IPRR) application system online.

Prior to beginning the e-Recordation application, the following items should be readily accessible:

  1. United States Patent and Trademark Office Registration Number or the United States Copyright Office Registration Number;
  2. Digital Images of the protected mark/work in “.jpg” or “.gif” format; and
  3. Familiarization with the applicable regulations for trademarks, 19 CFR 133.1, et seq.; and copyrights, 19 CFR 133.31, et seq.

It is important to remember that the right holders agree to supply all documents specified in 19 CFR 133.3, for trademarks; and 19 CFR 133.33, for copyrights; upon request. Failure to comply with such requests will result in the recordation being suspended, pending receipt of the documents, and prevent timely enforcement of the right holders’ intellectual property.

All applications will be processed in the order in which they are received and a separate application will be required for each recordation. The recordation fee for copyrights is $190, and the recordation fee for trademarks is $190 per International Classification of Goods. Upon completion of the recordation process, the CBP’s recordation database will allow CBP officers to monitor imports at each of the country’s 317 ports of entry.

For additional information on the Customs and Border Protection enforcement program, and how to obtain a recordation, please visit the CBP’s website or contact Maxey Law Offices.

Cyber Monday Seizures

The Monday after Thanksgiving, on November 28, better known to us as “Cyber Monday,” federal authorities seized 150 domain names for commercial websites that allegedly sold and distributed counterfeit goods and copyrighted works in an operation dubbed “In Our Sites.” Before seizing a domain, law enforcement officers purchased a variety of counterfeit products including DVDs; sunglasses; shoes; sports jerseys; and golf equipment from these websites to determine whether they offered counterfeit goods for sale, with most of these goods being shipped to the United States from foreign suppliers.

After a domain is seized, the federal authorities then post a banner on the site, as seen below, that notifies a visitor to the seized website of the penalties for willful copyright infringement.

The domain then becomes the federal government’s property if no challenges to the seizure arise. The National Intellectual Property Rights Coordination Center (IPR Center) of U.S. Immigration and Customs Enforcement has shut down 350 websites since its inception, in 2010. 116 of the 350 websites are now the property of the government.

Assistant Attorney General for the Justice Department’s Criminal Division, Lanny Breuer, stated that website operators, in most cases, do not challenge seizure of the domains.

A list of the seized websites can be found here.

The Trademark Parody Defense: A Corporation’s Catch-22 Conundrum

It’s happened to the best of us: we walk into a big box store to purchase that new T.V. or laptop; we approach a salesman to help us distinguish and select the goods; and we’re met poor customer service, often associated with “umms” and “uhhs” as the salesmen simply read off the information cards.  That’s exactly what Newegg, an online retailer, portrays in a commercial when it depicts a clueless young salesman wearing a short-sleeved blue shirt who is unable to offer any assistance. Newegg takes a jab at these brick and mortar stores by playing up its online expert reviews and excellent prices.

Best Buy, the consumer electronics giant, was anything but amused by the commercial.  It responded last month, by sending Newegg a cease-and-desist letter that demanded Newegg stop showing the commercial along with any other advertising which purported to disparage Best Buy’s employees in any way.  Best Buy, which has its employees wear similar blue shirts, complained that the commercial depicted the employee as being “slovenly and uninformed” about electronic products.  It also demanded that Newegg drop its “Geek On” marketing scheme, which it claims steps on its “Geek Squad” trademark.

Newegg ignored Best Buy’s demands, and instead, posted Best Buy’s cease-and-desist letter on its Facebook page and provided a YouTube link to the commercial parody.  Does Best Buy have a leg to stand on?

We often associate the parody defense with copyright infringement, which is part of the “fair use defense” in 17 U.S.C. § 107.  That statute allows for the fair use of a copyrighted work for purposes such as “criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research.”  There is, however, also a trademark parody defense which is based, not on statutory law, but on established case law.  Unlike copyright law, a defendant’s use of a parody as a mark may be considered to determine whether the plaintiff-owner of a famous mark can prove a claim that the defendant’s use of a parody mark will impair the distinctiveness of the famous mark.  Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252 (4th Cir. 2007).

The Fourth Circuit Court of Appeals, for example, has stated that a trademark parody is defined as “a simple form of entertainment conveyed by juxtaposing the irreverent representation of the trademark with the idealized image created by the mark’s owner.”  People for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359, 366 (4th Cir. 2001).  A parody must “convey two simultaneous – and contradictory – messages: that it is the original, but also that it is not the original and is instead a parody.”  Id.

In other words, courts have upheld the use of parodies as a legally protected form of free expression, as long as no chance exists that viewers will fail to notice that the commercials are indeed parodies, and that the viewers of the commercials will not mistake them for real commercials.  In this case, Best Buy claimed that Newegg’s commercial presented “a Blue Shirt in a disparaging way” and that it therefore damaged its goodwill.  Best Buy therefore asserted that “Newegg’s commercial is not a parody” because it “ridicules.”

Unfortunately for Best Buy, it is unable to claim it has a registered trademark on short-sleeved blue shirts, and although it may be possible for viewers to believe that the clueless young salesman might bear a striking resemblance to the salesman they recently encountered at a Best Buy store, there is little chance, if any, that a viewer would believe that Best Buy had sponsored the commercial.  As a result, Best Buy’s hurt feelings from being the target of ridicule is unfortunately part and parcel with the use of a parody.

So here is Best Buy’s dilemma, as aptly stated by Leslie J. Lott, an attorney in Coral Gables, Fla., and former director of the International Trademark Association: “If the awful customer service that is portrayed in the Newegg commercial is accurate, there’s no parody.  So it would be in a good legal position but in a horrible position from a public relations perspective.  If, on the other hand, Best Buy’s position is that their customer service is actually excellent, then that strengthens Newegg’s parody defense.” What is Best Buy to do?